One of the hardest actions that consumers will ever have to make is to decide to get out of debt.
Debt used to be a tool that people would use to get ahead.
Today people are using credit to get behind yet still feel like getting ahead.
The highest form of debt in America second to mortgage debt is credit card debt.
The reason is simple, people have no emotional connection when spending with a plastic card and so people spend more money.
So because of this people have a running balance on their cards.
The balance accrues monthly with a percentage rate of fifteen to thirty percent in some cases.
In fact some companies operate out of certain states just so they can charge more interest to consumers.
So once a consumer has a balance on their cards they usually pay the minimum payment every month which in most cases doesn't reduce the debt very much because the interest is so high.
So people carry balances on their cards longer than they initially wanted.
One of the best ways to reduce debt is to pay off cards smallest to largest.
This helps because as you pay off the smallest amount you gain momentum to pay off the next amount.
A person paying minimum payments will take years to pay off a balance, that's why it's crucial to start with the lowest amount first.
When the first card is paid off, it's important to call the company and cancel the card and then cut or shred the card.
This helps so that you no longer have access to adding amounts to the card.
Repeat the steps until all cards are paid off.